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Saturday, January 28, 2012

Why Britain, Europe and Japan Need More Immigration

To suggest such a thing would be a political non-starter in these countries but it is a major reason the future in these countries is not exciting.

Indeed in Europe there is an anti-immigration fervor, in France that likes to flatter itself as a champion for democratic values they have taken the extreme step of a law again Muslim women wearing a Burqa in public.

I have no idea how you could achieve more immigration politically but that's what is needed. What all these countries have in common and what puts them at a disadvantage vs. the US is they are homogeneous countries with declining birth rates and populations.

What has has always helped the US so is of course our large, expansive country so rich in resources-Britain after WWII was actually no longer able to feed itself. It's hard to imagine that ever happening here.

There's been some discussion over whether Japan suffered one or two lost decades-Krugman and Noah Smith say no-Matt Ygelsias says yes.

If you measure it in terms of GDP growth the answer is yes. I tend to think that Yglesias is at least right that while the Japanese coped in the 2000s before the 2008 crisis they didn't thrive and could have. Krugman agrees that with better policy it would have been better.

Yet no doubt part of the trouble for Japan was that until 1990-during their economic boom years-their population was growing-since 1990 it has been declining. No doubt their post 1990 performance has been hurt by this demographic figure, so if you handicap for this it doesn't look as bad in the 2000s. Still though even if it wasn't a recession during those years it certainly seemed like sub optimal growth.